TMI Blog2000 (2) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... ny other Section of the Act saving the proceedings initiated under the deleted/omitted provision. The consequential position that follows is that the proceeding lapsed after 6th August 1977 and any order passed in the proceeding thereafter is to be treated as non-est. In case the notice was issued after Section 11A was introduced in the Act, the proceeding will continue and will not be affected by this decision. - Civil Apeal No. 2132 of 1994 with C.A. Nos. 6556/1995, 3976/1990, 821-825/1995, 10216/1995, 12639/1996, 3664/1995, 5368/1995, 5369/1995, 8066/1995, 8068/1995, 8070/1995, 8071/1995, 8074/1995, 5625/1995, 4784/1992, 10395/1995, 2322/1995, 680-81/1986, - - - Dated:- 1-2-2000 - S.P. Bharucha, B.N. Kirpal, V.N. Khare, D.P. Mohapatra and N. Santosh Hegde, JJ. Shri G. Ramaswamy, B. Datta, Kapil Sibal, K.N. Bhat, and C.S. Vaidyanathan, Additional Solicitor Generals, F.S. Nariman, R.F. Nariman, Joseph Vellapalli, H.N. Salve, K. Parasaran, T.S. Krishnamurthy Iyer, Soli J. Sorabjee, V.P. Sarthy, Sr. Advs., P.H. Parekh, S.C. Sharma, D.M. Popat, Ms. Bina Madhavan, Ms. Jankhana Bagadia, (Ms. Gauri Rasgotra, Ms. Purnima Singh, Suman J. Khaitan,) Advs. for M/s. Khaitan Co., Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the season 1973-74. They were informed by the Superintendent, Central Excise, Kolhapur by letter 23-9-1974 that their factory did not figure in the list of new factories; therefore, they did not come within the scope of the Notification No. 189/73 and they would not be entitled for the sugar incentive rebate on excise duty on account of excess production of sugar for the year 1973-74 season. 5. On 7-12-1974, the appellant applied for rebate on excess production for the year 1974-75 on the basis of the Notification No. 146/74, dated 12-10-1974. This claim of rebate was for the amount ₹ 6,53,472/- on excess production of sugar within two months, October and November, 1974. The Superintendent, Central Excise, Kolhapur by his letter dated 26th May, 1975 informed the appellants that since a fresh L-4 license was issued to them, their factory will have to be treated as a new unit, and therefore, the rebate claim filed as an old unit could not be entertained. 6. Subsequently, the appellants made an application for grant of incentive rebate on the sugar manufactured by them in terms of the Notification No. 189/73, dated 4th October, 1973. This rebate claim was scrutinized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orks Ltd., Kolhapur cannot be considered as a new factory and that they commenced manufacturing of sugar for the first time after 1-10-1973. M/s Kolhapur Cane Sugar Works Ltd., Kolhapur, do not thus appear to be entitled to the rebate sanctioned to him as a new factory. Whereas it appears that M/s Kolhapur Cane Sugar Works Ltd., Kolhapur are not eligible to rebate for the season 1973-74 under any other provisions of the Notification No. 189/73 dated 4-10-1973. 2. Now therefore M/s Kolhapur Cane Sugar Works Ltd., Kolhapur are hereby required to show cause the Assistant Collector, Central Excise, Kolhapur, why the rebate of ₹ 61,14,930/- erroneously sanctioned and allowed to be credited to their PLA by the Superintendent under his letter No. Rebate/ KCW/73-74/76 dated 23-7-1973, should not be recovered from them under Rule 10A of the Central Excise Rules, 1944. 3. M/s the Kolhapur Cane Sugar Works Ltd., Kolhapur, are further directed to produce at the time of showing cause all the evidence upon which they intend to rely in support of their defence. 4. M/s Kolhapur Cane Sugar Works Ltd., Kolhapur should indicate in the written explanation whether they wish to be hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also because it applies only where there in a repeal by a Central Act whereas in the present case the repeal was by a notification. According to the appellant the order passed after August, 1977 could not invoke the old Rule 10 which had been omitted. The High Court repelled these contentions and dismissed the petition. 11. When this appeal and the connected appeals came up for hearing before a bench of two learned judges of this Court the Bench considering the submissions made by the counsel appearing for the appellants took the view that having regard to the importance of the questions involved the matter should be considered by a Constitution Bench. The relevant portion of the Reference order dated 11-9-1997 is quoted hereunder : Shri F.S. Nariman the learned Senior Counsel appearing for the appellants in Civil Appeal No. 2132/94, has placed reliance on the decision of the Constitution Bench of this Court in Rayala Corporation (P) Ltd. Ors. v. Director of Enforcement, New Delhi, 1970. (1) SCR 639. In that case this Court was dealing with the provisions of Rule 132A of the Defence of India Rules, 1962 and it was held that the provisions of Section 6 of General Cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pass appropriate order determining the amount of duty or charges due from such person and thereupon such person was to pay the amount so determined within 10 days from the date on which he is required to pay within the period specified. 14. Rule 10A contained the provision regarding residuary powers for recovery of sums due to Government where the Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty or of any other sum of any kind payable to the Central Government under the Act. The procedure laid down in this rule was similar to Rule 10 i.e. issue of a show-cause notice for determination of the amount due, etc. 15. Rules 10 and 10A were omitted and a new provision was introduced by Rule 10 with effect from 6th August, 1977. In the said Rule a period of 6 months was prescribed for initiating action for realization of the duty which has not been levied or paid or has been short-levied, erroneously refunded or any duty assessed has not been paid in full. No provision regarding residuary power was made in the Rules. 16. Section 11A which was inserted with effect from 17-11-1980 vide Notification No.182/80-C.E., dated 15-11-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to be supported on the basis of the provisions in Section 6 of the General Clauses Act it will be convenient to quote the said section : 6. Effect of repeal - Where this Act, or any (Central Act) or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture of punishmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the D.I.Rs. could have been instituted even after the repeal of that rule. 23. In Mahendra Mills Ltd. v. Union of India [1988 (36) E.L.T. 563 (Guj.)] it was held that when old Rules 10 and 10A were omitted on 6-8-1977 and new Rule 10 was brought in force on that very day and as there was no saving clause in the notification deleting and introducing these rules, and as Section 6 of the General Clauses Act did not help as this is a case of the omission of rules and not of their repeal, the pending proceedings under old Rule 10 could not be continued and could not be adjudicated upon under new Rule 10 by the departmental authorities. Consequently, the proceedings pending for adjudication under show cause notices under old rule prior to 6-8-1977, became incompetent after 6-8-1977. Reliance was placed on the decision in Rayala Corporation (supra). The High Court after considering the effect of omission of Rules 10 and 10A with effect from 6-8-1977 and the subsequent enactment of Section 11A of the Central Excise and Salt Act, 1944 observed that it is pertinent to note that while enacting new Rule 10, sub-rule (2) was enacted which in terms provided that the Assistant Collector shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rose for consideration. In the facts of the case this Court held that where a reference was made to the IAC in accordance with the law in force on the date of reference and the IAC was thus seized of the matter, he did not cease thereof on account of the deletion of sub-section (2) of Section 274. The principle underlying Section 6 of the General Clauses Act was relied in support of the view. This Court summed up the finding in these words (Para 11) : We are, therefore, of the view that the Inspecting Assistant Commissioner did not lose the Jurisdiction to continue with the proceedings pending before him on 31-3-1976 by virtue of the deletion of sub-section (2) of Section 274 by the Taxation Laws (Amendment) Act, 1970 with effect from 1-4-1976. He was entitled to continue with those proceedings and pass appropriate orders according to law. 28. The applicability of Section 6 of the Act to the case was not questioned in the case. Therefore, the decision should be read in the context of the facts of the case. It has no general application. 29. In the case of S. Krishnan v. State of Madras (AIR 1951 SC 301) this Court held that the general rule in regard to a temporary statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aled in 1973. A contention was raised that the provisions of the Act having been repealed in 1973 the opposite parties could not have initiated proceedings in 1976. The contention was repelled by the High Court relying on Section 6 of the General Clauses Act. This Court referring to Section 6 observed that the learned Counsel for the appellant could not show any provision from which it could be gathered that the provision in the Act at the time of repeal indicate that the legislature intended otherwise than what is provided in the Section 6 of the General Clauses Act. In that case the applicability of Section 6 to the case was not in question as the relevant provisions of the statute were omitted by a Central enactment. The decision is distinguishable. 31. The Allahabad High Court in the case of Ajanta Paper Products, Ratanpura, Agra v. Collector of Central Excise, Kanpur [1982 (E.L.T.) 201 (All.)] also took a similar view. 32. We have carefully considered the decisions in Saurashrta Cement and Chemical Industries (supra) and Falcon Tyres case (supra). Though the judgments in these cases were rendered after the decision of the Constitution Bench in Rayala Corporation Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Full Bench have no substance as they are not relevant for determination of the question raised for the reasons stated herein. 34. In paragraph 21 of the judgment the Full Bench has noted the decision of a Constitution Bench of this Court in Chief Inspector of Mines v. K. C. Thapar - AIR 1961 SC 838 and has relied upon the principles laid down therein. The Full Bench overlooked the position that was a case under Section 24 of the General Clauses Act which makes provision for continuation of orders, notification, scheme, rule, form or bye-law, issued under the repealed Act or Regulation under an Act after its repeal and re-enactment. In that case Section 6 did not come up for consideration. Therefore, the ratio of that case is not applicable to the present case. With respect we agree with the principles laid down by the Constitution Bench in M/s Rayala Corporation case (supra). In our considered view the ratio of the said decision squarely applies to the case on hand. 35. For the reasons set forth above we do not accept the view taken in Saurashtra Cement and Chemical Industries Ltd. (supra), in Falcon Tyres Ltd. (supra) and the other decisions taking similar view. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at never existed. To this rule, an exception is engrafted by the provisions of Section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision. 39. In the present case, as noted earlier, Section 6 of the General Clauses Act has no application. There is no saving provision in favour of pending proceeding. Therefore action for realisation of the amount re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cific, we opined as under :- The golden rule of law is that the pending cases would continue as if the provisions had not been omitted, provided the omitting provisions do not contain any indication to the contrary. In other words, the repeal or omission does not affect rights, privileges, obligations or liabilities acquired, accrued or incurred under any provisions so repealed. But this golden Rule is contained in section 6 of the General Clauses Act, 1897 (10 of 1897) and is specifically applicable to pending cases in respect of rights, privileges, obligations or liabilities acquired, accrued or incurred under an Act passed by the legislature or under a Regulation made by the President The Central Excise Rules are neither enactments passed by the legislature nor are Regulations made by the President. Therefore, this golden rule is not applicable to the omission, substitution or amendment of Central Excise Rules, 1944. pending cases arising out of repealed provision cannot continue unless they are saved either by the repealing provision itself or under the General Law of the land. So far as the saving of pending cases under the General Law of the land is concerned, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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